Commercial PV storage is set to grow by a factor of 700 by 2017 to become the largest segment in the solar storage market, projections by IHS suggest.

Currently the smallest market segment at just 3.2MW, commercial storage is due to mushroom to almost 2.3GW by 2017, dwarfing use of the technology in residential and utility-scale PV.

Such growth would see commercial storage leap from a 5% to a 40% share of the PV storage market between 2012 and 2017, according to IHS’s report ‘The Role of Energy Storage in the PV Industry’.

IHS said the predicted growth would be driven by a combination of rising electricity prices and the demand among businesses for back-up power in areas where grid supplies are unreliable.

“Just last year, commercial was the smallest market for PV storage systems, far behind the residential and utility-scale segments,” said Abigail Ward, PV analyst at IHS.

“However, facing rising energy prices and the growing need for backup power supplies, commercial enterprises are turning to PV storage solutions that work in concert with their solar-power systems. This will allow commercial to surge past residential and utility to become the largest market for PV storage in just four years.”

Leading the charge will be businesses in North America, which IHS said would account for 40% of commercial-scale PV storage installations by 2017.

Japan will also be a key market, as it looks for new indigenous power sources to make up the generation capacity lost with the closure of its nuclear reactors following the 2011 Fukushima disaster.

But the report said the growth of commercial energy storage was now constrained by the small number of suppliers for the market segment.

“At present, many of the suppliers active in the PV storage business are targeting the residential PV market, where systems are largely being installed to increase the on-site self-consumption of a PV system owner,” Ward said.

“However, installations in the commercial PV sector potentially can reach the point of payback much more quickly than those in the residential area. This will encourage many PV storage suppliers to enter the business in the coming years.”